Betting On Maroon: Queensland Government Bids For Virgin Australia

As we approach the final corner of the bidding race, deadline 15 May, the Queensland government has announced plans to make a bid for Virgin Australia, in an attempt to keep the airline’s HQ in Brisbane.

As we approach the final corner of the bidding race, deadline 15 May, the Queensland government has announced plans to make a bid for Virgin Australia, in an attempt to keep the airline’s HQ in Brisbane.

With the bidding deadline fast approaching (Friday 15 May), and this unexpected bid from the Queensland government, dubbed “Project Maroon” could be what Virgin Australia needs to be resurrected from the COVID-19 cave.

According to reports by the Guardian, the treasurer, Cameron Dick, said the state was willing to buy equity in the airline, as well as investing through other methods including a loan or guarantee.

“We have an opportunity to retain not only head office and crew staff in Queensland, but also to grow jobs in the repairs, maintenance, and overhaul sector and support both direct and indirect jobs in our tourism sector,”

Cameron Dick, The Treasurer

Dick said the QIC, led by chief executive Damien Frawley, had developed “a comprehensive strategy to ensure Queensland is best positioned for a successful bid”.

The Queensland Investment Corporation (QIC) will be advising the government “on all aspects of the bid, including the optimal partner group, the quantum, and structure of the state’s contribution, as well as probity and governance.”

Dick said that it is a “competitive space”, but believes “Queensland is a serious contender”.

What’s going on?

Virgin Australia went into voluntary administration on April 21 due to a mounting debt cloud, owing almost $7 billion to more than 12,000 creditors.

It’s believed that $1 billion is owed to customers in future flight bookings and credits owing since COVID-19 began.

READ: Virgin Australia Puts A Pause On New Travel Credits & Refunds

About 9000 staff work directly for Virgin Australia with up to 15,000 jobs at risk should a decision be made to streamline the airline to service its debt.

“We remain confident that our target of achieving a sale by the end of June is achievable,”

Vaughan Strawbridge, Deloitte

The next meeting will take place on August 22 and the hope is that by then, a new owner for Virgin Australia will be in place.

More to come.